Tampa insurer to take thousands of policies from Citizens

The state has approved Tampa-based insurer Slide to assume up to 25,000 policies from the Florida-backed agency Citizens Property Insurance Corp., which has reached its limit.

The taxpayer-subsidized insurer, which was created as a last resort resource for when residents can’t find coverage in the private market, hit a record of serving 1.3 million customers. Roughly 300,000 policies were from Tampa Bay homeowners.

Late last year, the Florida Legislature required all Citizens policyholders to buy flood insurance. The mass of new policies were largely connected to homeowners who suffered Hurricane Ian-related property damage. The storm caused private insurers to raise rates or drop customers in the already shaky insurer climate. Before Hurricane Ian’s destruction in 2022, six Florida insurers declared insolvency. 

UPC, doing business as United Property and Casualty Insurance, was the latest to declare insolvency this year; however, Slide Insurance Co. also acquired the exclusive renewal rights for over 91,400 Florida homeowners insurance policies from UPC.

According to a May 31 filing with the Office of Insurance Regulation, 26,000 policies from Citizens will be assumed on or around Aug. 22, with 24,000 personal residential policies and 1,000 multi-peril policies. 

Loggerhead Reciprocal Interinsurance Exchange was approved to assume the 1,000 multi-peril policies. None of the assumed policies will be subject to any incentive or bonus plan. 

Per the agreement, Slide must provide coverage substantially equivalent to what was covered by Citizens at approved rates. The insurer must either obtain a new policy application from each policyholder or have a copy of a policyholder’s application filed with Citizens. Slide must also maintain catastrophe reinsurance at acceptable levels, notify the state of any terminated reinsurance agreements and participate in examinations by the state’s office.

High prices for high-risk markets

“As Florida continues to be considered a high-risk market for insurers, there’s a greater need for competition, especially as 15% of homeowners are uninsured,” Mark Friedlander, Insurance Information Institute (Triple-i) director of corporate communications, previously commented about the market. 

“A lot of retirees are on fixed incomes and paid for their homes in cash; thereby, they are not required to have a mortgage,” Friedlander said. “After Hurricane Irma (in 2017), a lot of homeowners exited insurance plans; even those who have seven-figure-priced homes decided to self-insure.” 

The Federal Emergency Management Agency (FEMA), which traditionally calculates flood insurance prices based on flood zone maps, is now changing its pricing model to be based on an individual property’s distance from the ocean, rainfall levels and the cost to rebuild a home. Roughly 76% of the population lives in coastal areas that are prone to flooding, according to a state report. 

As a result of the new calculation methodology, Floridians are expected to see a sharp increase in flood insurance rates; however, State Attorney General Ashley Moody stated last week that “FEMA is making flood insurance unattainable for many policyholders by raising rates, going against congressional mandates that the National Flood Insurance Program provide affordable coverage.” 

She contended that the new methodology is unlawful, arbitrary and capricious.

Other attorney generals in Idaho, Kentucky, Louisiana, Mississippi, Montana, North Dakota, South Carolina, Texas and Virginia are also fighting against the new pricing model.